Question
Jensen Fences uses job order costing. Manufacturing overhead is charged to individual jobs through the use of a predetermined overhead rate based on direct labor
Jensen Fences uses job order costing. Manufacturing overhead is charged to individual jobs through the use of a predetermined overhead rate based on direct labor costs. The following information appears in the company's Work in Process Inventory account for the month of June: |
Debits to account: | ||
Balance, June 1 | $ | 5,000 |
Direct materials | 19,000 | |
Direct labor | 12,100 | |
Manufacturing overhead (applied to jobs as 125% of direct labor cost) | 15,125 | |
Total debits to account | $ | 51,225 |
Credits to account: | ||
Transferred to Finished Goods Inventory account | 44,000 | |
Balance, June 30 | $ | 7,225 |
Instructions
a. | Assuming that the direct labor charged to the jobs still in process at June 30 amounts to $1,500, compute the amount of manufacturing overhead and the amount of direct materials that have been charged to these jobs as of June 30. |
b. | Prepare general journal entries to summarize: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
1. | The manufacturing costs (direct materials, direct labor, and overhead) charged to production during June. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
2. | The transfer of production completed during June to the Finished Goods Inventory account. | |||||||||||||||||||||||||||||||||||||||||||||||||||||
3. | The cash sale of 80 percent of the merchandise completed during June at a total sales price of $48,000. Show the related cost of goods sold in a separate journal entry.(If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
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